Saturday, May 30, 2009

eBay "Giving Works" and MissionFish are a Scam

eBay now allows sellers to auction an item for charity. Sellers can agree, in advance, to donate anywhere from 10% to 100% of the proceeds to the charity of the seller's choice, so long as that charity is on eBay's approved list. The listing shows a cute little ribbon, telling the bidder that the auction is for the benefit of charity, as well as a short paragraph extolling the benefits of the particular charity that will benefit. What's more, eBay discounts its fees in connection with charity auctions. The discount is proportional to the percentage donated to charity; eBay gives up almost all its fees if the auction is 100% for charity. Sounds great, but sadly it is a scam.

In the fine print, it turns out that all donations must be made through "MissionFish." What's more, MissionFish takes a fee for its service. There is a small notice on each charity listing stating that a "small deduction may apply." Those words are in faint print and small type. There is no "may" about it, and the deduction certainly is not "small." In fact, MissionFish charges far more than eBay. That's right, you would be better off ignoring eBay's offer to waive part of its fees. Simply sell the item, pay the fees and donate the balance to charity. Far more will go to charity that way than if you take eBay up on its supposedly charitable offer.

MissionFish charges:

20% of the first $50

15% of the next $150

10% of the next $800 and

5% of the amount above $1,000

So, for an item that sells for $500, MissionFish will charge $72.50. That's right, MissionFish takes $72.50 from the charity for the "service" of delivering your $500. By way of comparison, on the same $500 item, eBay would charge a $4 insertion fee (at most), plus a $19.69 final value fee, for a total of $23.69. So, eBay does not waive its fee. Quite to the contrary, the fee nearly triples! And, what is worse, you do not even see it unless you look very carefully.

Here is how MissionFish and eBay hide the fact that they are stealing from charities. Again, say you auction an item for $500 to benefit charity. The buyer sends the money to you. You then take the $500 and give it MissionFish, which tells you that you made a donation of $500. You never find out that about 15% of your money went to MissionFish.

Finally, eBay (which owns paypal) gets a fee when the money is sent to you by the buyer. So, you end up with less than $500 because paypal/Ebay takes a bite up front, but then you have to give MissionFish the full $500 so that MissionFish/paypal can take their next bite. And, if you forget to feed MissionFish the full $500, they will bill your credit card. Want to take your credit card off their account? No problem, just enter a new card and click that you authorize them to charge that. The website does not allow you to simply remove your credit card.

Do not be fooled! If you want sell something for charity, by all means do it, but do not tell eBay. Just sell the item and donate the proceeds yourself.

Thanks for this info, I was ready to donate to The Red Cross Japanese efforts. No way, they would take $10 of a $50 donation, netting The Red Cross $40. I'll go to The Red Cross site to donate! Thanks again!

MissionFish isn't any different than The Red Cross. The only way you can get more of your donations going to charities is to donate locally. However, local, national, whatever, they still take part of it for their operating expenses, because to run a multi million dollar organization like The Red Cross, it takes a lot of YOUR money. Plus, you can still take the full amount you contributed off on your taxes, cause it still went to the organization. If anyone things 100% of their donation dollars are strictly used for charities aren't looking at the big picture.

Clearly, all charities have overhead expenses, and it is impossible for 100% of your donation to go to a cause. It pays to investigate a charity to see how efficient it is.

But that is not my point in this post. I made a donation to Much Love Animal Rescue, and MissionFish stuck itself in the middle and grabbed a huge chunk of my donation! I don't know what MissionFish is, nor what it does, and I did not want to make a donation to it. That is the point of the post.

The donation process itself is also a scam. Rather than send the percentage donations to MissionFish directly, the money goes to your paypal account then you are billed out of that for the charity. Even though ebay fees are pro-rated/waived for the donation, they still charge the 2.9% paypal fee on the total amount!

This means that if you set up an auction to go 100% to charity, ebay/paypal still skims their 2.9% cut off the top!

I literally owed money to paypal after auctioning something 100% to a charity!

It is a complete scam. Not only do they take a huge fee, but they also hold the money for a long time. A donor sold an item for my charity; the buyer bought thru paypal. Paypal held the funds for 10 days then MissionFish took the money from the seller and is holding them for 30 days before they release them to my charity. Net/net they will take a huge fee and hold them money for 45 days before they release it. No wonder the CEO lives in the UK (and, by the way, some of the MissionFish employees hold dual positions with PayPal per LinkedIn...interesting)...

Hmmm, MissionFish is now called Paypal Giving Fund (www.paypalgivingfund.org) and claims to only deduct 5% from community sales in order to fund the program costs. Nonprofits selling directly aren't charged anything. If that's current setup then it would make charitable selling on ebay on par with most any donation program that has it's own internal costs. I suppose I can tolerate this program as long as it's not taking a +10% or +20% cut.

Introduction

You've stumbled across my personal blog, where I post whatever I happen to feel like writing about. There is no theme or fixed topic, nor any schedule for when I post other than when I feel like it. These are my personal opinions, and I am posting them on behalf of myself alone.